Performance, Commentary & Portfolio
ISIN GB00BNG2M159 | SEDOL BNG2M15
Fund Manager’s Review
Allianz Technology Trust’s Net Asset Value (NAV) total return was -13.60% in March, compared to the Dow Jones World Technology Index return of -11.15% both in GBP.
March was a disappointing month for technology stocks amid ongoing uncertainty regarding President Donald Trump’s trade policy. Stock markets weakened sharply at month end ahead of the President’s self-dubbed “Liberation Day” of sweeping tariffs on 2 April, coupled with continued conflict in Ukraine and Gaza and escalating concerns surrounding Iran’s nuclear program. All technology-related industries were lower, led to the downside by headwinds in semiconductors.
Monthly performance trailed the benchmark as positive allocation impacts were offset by short-term stock picking. Performance was aided by a modest cash weight and an underweight position in semiconductors. This was offset by stock selection in software, interactive media and IT services.
Contributors
Independent enterprise identity management platform Okta, Inc. performed well thanks to upside earnings results led by product portfolio expansion. The company appears to be moving past security incidents with improved traction on large customers, while stabilizing trends at small and midsize businesses were consistent with other cloud-software providers.
Our below-benchmark allocation, to graphics processing and related networking leader NVIDIA Corp. aided results as the stock declined double-digits amid a moderation in artificial intelligence (AI)-related hardware names combined with increasingly opaque macroeconomic conditions, as well as trade and tariff policies.
Our allocation to Zscaler, Inc., a provider of web and mobile security, threat protection, cloud application visibility and cloud-enabled networking solutions, contributed to performance as the stock was slightly
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near‐term volatility may persist and our expectation is that market leaders who execute well are likely to be rewarded |
higher following upside earnings results led by large-order momentum, its expanding product suite, and upselling to existing customers.
Our relative positioning in Taiwan Semiconductor Manufacturing Co., Ltd. aided relative results, as did our off-benchmark exposure to electrical components maker Amphenol Corp. which benefited from its incremental value exposure.
Detractors
Shares of Atlassian Corp., a developer of project management and software development tools, declined amid overall headwinds in software-related names, combined with a potential for sales cycle elongation in light of the current macroeconomic environment. We continue to hold the stock given its leadership position and potential for future revenue and earnings acceleration.
Our active exposure to social networking platform Reddit, Inc. detracted from performance, due in part to a decline in higher-beta stocks alongside the potential impact from new search algorithms, which we believe make it increasingly challenging to keep pace with larger digital advertising peers. Our conviction in the stock, which benefits from outsized growth and a loyal user base, remains intact.
Our active position in open-source database platform MongoDB, Inc. detracted, as the stock sold off despite upside earnings results as investors were focused on next year’s guidance which came in below expectations on revenue and margin metrics. We continue to hold shares given its leading platform and longer-term growth potential.
Our below-benchmark allocation to enterprise software, cloud storage and cyber security leader Microsoft Corp. and the below-benchmark allocation to social networking, gaming and ecommerce provider Tencent Holdings Ltd. also offset relative performance results for the month.
New buys and sells
Turnover in March was undertaken at a lower-than-normal level and reflective of the market volatility and given our preference to not to overreact to the broad-based sell-off. We newly purchased shares of two Chinese companies: online marketplace Alibaba Group Holding as well as media and services holding company Tencent Holdings Ltd., in an effort to diversify the portfolio outside of the U.S. combined with the improved investor sentiment and value-related exposure within China. We also bought shares of Intuit Inc., a business and financial management software provider, given its attractive growth versus valuation mix, favorable execution across product lines and durable demand drivers, led in part by exposure to tax preparation services. There were no portfolio sales for the period.
Outlook
Despite the market downturn experienced over the past several weeks, led by growing uncertainty over trade and tariff policies and a rotation into stocks with greater value exposure, we remain constructive on the technology sector given the potential for earnings growth and its attractive medium-term risk-reward profile. We fully acknowledge that near-term volatility may persist and our expectation is that market leaders who execute well are likely to be rewarded.
Investors are likely to continue to closely monitor interest rate levels, with future cuts forecasted, which are likely to benefit technology companies incrementally. Corporate earnings have been relatively resilient, and valuations appear reasonable given the secular growth potential of the asset class. Our expectation is that merger and acquisition activity may continue to improve and companies which have ample cash may look to purchase new assets at a discount. Amid any sell-offs, we are opportunistically looking to upgrade select names and add to our highest conviction ideas to better position the portfolio for improved performance.
Our focus remains on building the portfolio from a bottom-up perspective with a macro-overview. Technology remains a key enabler across almost every vertical industry, and we will continue to seek stocks which solve difficult problems and can be long-term outperformers. Despite short- term periods of higher volatility, earnings growth ultimately drives stock prices over the long term, and in our view, we are still early in the spending trend supporting this dynamic segment.
Mike Seidenberg
11 April 2025
This is no recommendation or solicitation to buy or sell any particular security. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.
1.Calculated as 10% of outperformance against the benchmark, after adjusting for changes in share capital and will be capped at 1.75% of the Company’s average daily NAV over the relevant year.
2. As at the Trust’s Financial Year End (31.12.2023). Ongoing Charges (previously Total Expense Ratios) are published annually to show operational expenses, which include the annual management fee, incurred in the running of the company but excluding financing costs.
Registrations |
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Company No. |
03117355 |
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FATCA GIIN No. |
YSYR74.99999.SL.826 |
Codes |
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RIC |
ATT.L |
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SEDOL |
BNG2M15 |
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ISIN |
GB00BNG2M159 |
Awards & Ratings
Investment Week Investment Company of the Year Award 2021 – Specialist category
Allianz Technology Trust won this coveted award in November 2021, having also been a winner in similar categories in 2020, 2019, 2018, 2017 and 2015. This award recognises excellence in closed-ended fund management and highlights ATT’s consistent performance over time. The judging panel was made up of some of the UK’s leading researchers and investors in investment trusts and closed-ended companies, as well as several senior board members with many years’ experience in the industry.
Association of Investment Companies Shareholder Communication Awards 2021
Allianz Technology Trust won the Best Large Trust category, in recognition of its consistent, high achievement. The publication noted that ATT achieved the highest returns among this year’s award-winners (performance measured over three years to 31 January 2020), calling it “a worthy winner of our most prestigious sector award”. This accolade is an independent, statistical and qualitative assessment of ATT’s performance and highlights the Trust’s outperformance both in its class and against its peers.
Shares Awards 2020 – Best Investment Trust
Allianz Technology Trust was pleased to win ‘Best Investment Trust’ in The Shares Awards 2020. The awards were voted by readers of Shares and by the general public, making the award truly representative of the people who invest in the Trust and its peers. In presenting the award, Shares Magazine noted: “The technology sector had been in the ascendancy even before the events of 2020 but the global pandemic has super-charged this trend. We have been even more reliant on tech to tackle the day-to basics of work and home life. Staying in touch through video conferencing, ordering goods and food online and streaming entertainment to keep us entertained at home. Allianz Technology Trust is plugged into these themes and was voted Best Investment Trust in this year’s Shares Awards.”.
Kepler Growth Rating
Kepler Ratings are designed with investment trusts specifically in mind and aim to highlight those which they consider to be ‘best in class’ based on a clear, easy to understand set of quantitative tests. The selection system is entirely quantitative, setting aside all personal biases and views, looking at the universe in a purely objective way.
Morningstar Rating Allianz Technology Trust has a 5 star rating with Morningstar. This is a risk-adjusted, cost-adjusted comparison of fund performance within fund categories. The underlying methodology is robust and accounts for periods of volatility-downward volatility in particular-and also adjusts for fund expenses, including sales charges. That means the more expensive the fund is, the harder it will be for the fund to earn a high star rating.
A ranking, a rating or an award provides no indicator of future performance and is not constant over time.
Morningstar star rating © 2021 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.